Fiji Carbon Fund Emission Reduction (ER) Program

The development objective of the Carbon Fund Emission Reduction Program Project is to make payments to the Program Entity for measured, reported and verified Emissions Reductions (ERs) from reduced deforestation, forest degradation and enhancement of forest carbon stocks (REDD+) at the national level in Fiji and to ensure that paid amounts are distributed according to an agreed benefit sharing plan. This project has two components. 1) The first component, Measurement, reporting, and verification (MRV) and payment of the ERs generated by the project, aims that the payment from the Carbon Fund under the Emissions Reduction Payment Agreement (ERPA) will be based on verified ERs measured and reported by the program entity. 2) The second component, Distribution of ER payments as per the Benefit Sharing Plan, aims that the proceeds from verified ER payments will be shared according to an agreed BSP prepared by the government of Fiji (GoF), designed through a highly consultative process and based on the criteria in the Carbon Fund Methodological Framework and in a manner that is acceptable to the World Bank.

The key expected outputs before actual implementation included:
• Establishment of systems and frameworks:
I. A Measurement, Reporting, and Verification (MRV) system to track emission reductions.
II. A Benefit Sharing Plan (BSP) to define how funds will be distributed fairly among stakeholders.
III. Safeguards frameworks to ensure compliance with environmental and social standards
.
• Ex-ante targets for emission reductions:
I. Gross expected emission reductions: 3.5 million tCO₂e over 2020–2024.
II. Net expected emission reductions (after risk buffers): 2.52 million tCO₂e available for transfer to the Carbon Fund
• Expected financial output:
I. Up to US$12.5 million in results-based payments from the Forest Carbon Partnership Facility (FCPF) Carbon Fund, assuming a price of US$5 per tCO₂e
• Planned reporting and payment schedule:
I. Three reporting/verification periods, with the first retroactive from July 2019, leading to staggered payments between 2021 and 2025
• Beneficiary and stakeholder preparation:
I. Identification of eligible beneficiaries (landowners, community trusts, smallholder farmers, private sector, NGOs, provincial councils).
II. Readiness for distribution of 85% of net carbon benefits to these groups, with 10% set aside for operational costs and 5% as a performance buffer

The Government’s ER Program is designed to mainstream gender issues to ensure that gender differential impacts are addressed. A gender analysis in the ER Program area was conducted and a GAP with specific results indicators for monitoring was completed. The GAP will promote gender equality impacts and mitigate possible risks and negative impacts. The GAP has three approaches: (a) provide opportunities for and strengthen the role of women in program activities, (b) address limited availability of sustainable livelihoods and gender equality in livelihood opportunities, and (c) and support the monitoring and dissemination of information about environmental sustainability and social risks to men and women as part of safeguards. Furthermore, the benefit sharing approach and the program design process, safeguards implementation, forest dependent participation, and citizen engagement issues all include efforts to ensure and enhance female involvement. The M&E indicators will be disaggregated by
gender. Overall, the gender aspects address the strategic and practical needs of indigenous iTaukei women while ensuring equity in the process. All proposed enabling environment and investment activities will be screened through the gender lens for effective mainstreaming.

1. The first Emission Reductions (ER) Monitoring Report for 2019–2020 was submitted to the FMT on April 4, 2023.
2. Technical verification of ERs has been completed.
3. Confirmation of the legal basis for the Government of Fiji to transfer title to ERs is still needed before ERs can be transferred to and paid for by the FCPF.
4. This would be the first payment under Fiji’s Emission Reductions Payment Agreement, which can unlock up to US$12.5 million for 2.5 million tCO₂e.
5. Monitoring of ERs for 2021–2024 is currently underway.
6. Benefit Sharing Plan (BSP) was approved by Cabinet on April 25, 2023. Leases and licenses need to be signed, and agreement on how to implement the BSP in practice is required.
7. No ERs have been transferred, and no payments have been received from the FCPF yet.
8. Cumulative disbursements: 0% disbursed for both TF-B2733 and TF-B2734.
9. Progress towards PDO and overall implementation: Moderately Unsatisfactory.
10. Overall risk rating: Substantial across all risk categories (political, macroeconomic, technical, institutional, fiduciary, environment/social, stakeholders).

• Benefit sharing plan (BSP) approved by Cabinet 25 April 2023.
• Progress towards PDO & Implementation Progress: Moderately Unsatisfactory
• Both financing agreements remain effective and close on 31 December 2025

•    Establishment of a Measurement, Reporting, and Verification (MRV) system for greenhouse gas emissions and carbon sequestration.
•    Strengthening of technical capacity within Fiji’s Ministry of Forestry and other stakeholders to apply REDD+ methodologies.
•    Use of remote sensing, GIS, and forest monitoring technologies for tracking deforestation and forest degradation.
•    Transfer of knowledge and systems from the World Bank/FCPF to Fiji on carbon accounting, safeguards frameworks, and benefit-sharing mechanisms.

•Benefit Sharing Plan (BSP): Builds capacity of landowners, community trusts, smallholder farmers, NGOs, and provincial councils to manage and distribute carbon benefits fairly.
•Institutional strengthening: Ministry of Forestry and related agencies trained in safeguards, financial management, and legal frameworks for ER transfers.
•Technical capacity: Training and systems for Measurement, Reporting, and Verification (MRV) of emission reductions.
•Stakeholder readiness: Preparations for distribution of 85% of carbon benefits to beneficiaries, with processes for leases, licenses, and agreements.